Tech-friendly cities struggle with new business rules

BOSTON (AP) – A renowned technology hub that is home to some of the country’s top universities, Boston is emerging as an unlikely battleground for web-based businesses like Airbnb and Uber, with some saying more regulations are needed to prevent the upstarts from disrupting communities and more established industries.

Boston, prompted by the arrival of the mobile app Haystack, recently banned services that allow people to offer their public parking spaces for sale. Now the City Council is considering restrictions on ride-sharing services like Uber, Lyft and Sidecar and lodging websites like Airbnb, HomeAway and FlipKey, which allow users to book short-term stays in private residences. Across the river in Cambridge, home to Harvard and MIT, officials have been trying for years to restrict rideshares.

From New York to San Francisco, cities have been wrestling with the same questions and developing solutions ranging from outright bans to minimum safety requirements. At the heart, officials say, the issue is about balancing public safety and governmental oversight with the services’ growing popularity.

But technology companies point out that the push for regulation is ironic in many technology-heavy cities that have built their reputations, in large part, on being on the leading edge.

“For a city known for its innovation and progressiveness, it is shocking that Cambridge would cling so blindly to the past,” Uber wrote on its website in June as it called on supporters to speak out against proposed regulations.

File photo shows a Lyft passenger getting into a car in San Francisco. Boston is considering restrictions on ride-sharing services like Uber, Lyft and Sidecar and lodging websites like Airbnb, HomeAway and FlipKey, which allow users to book short-term stays in private residences. AP

Andrea Jackson, the chair of Cambridge’s Licensing Commission, said Uber was oversimplifying the challenges emerging business strategies pose to cities.

“We know that these things are likely here to stay,” she said.

“My only concern is that they are safe. I want to make sure the drivers have background checks. I want to make sure they have adequate insurance.”

Safety mandates have been imposed in other cities. Chicago, for example, assesses licensing fees and requires rideshare companies to submit to background checks, vehicle inspections, driver tests and random drug screens of their employees. The companies are also required to obtain $1 million in commercial auto liability coverage.

Uber spokesman Taylor Bennett said the company understands the need for thoughtful regulations but will fight attempts to protect the local taxi industry.

“Simply reacting to taxi or creating regulations or ordinances to protect taxi is protectionism, and that only serves one entrenched industry when consumers are clamouring for more and better options to get around town,” Bennett said.

Bennett said Uber is focused on securing specific, statewide authority from legislators to operate in Massachusetts, as they have in Colorado and other states.

Austin, Texas has set up a licensing system with an annual fee and limits on the number of units in a building – or houses in a residential neighbourhood – that can be rented at a given time. Portland, Oregon allows single-family homeowners – but not apartment and condo owners – to offer short-term rentals, as long as they complete a safety inspection and neighbour notification process.